The crypto mining industry is reportedly facing disruptions following the Russia-Ukraine conflict that could disrupt vital supplies for semiconductor manufacturing. Furthermore the industry is still affected by the shortage of chips for almost two years which has driven up the price of graphics cards.
Ukraine supplies about 90% of US semiconductor-grade neon, which is the material used in the chip-making process, advisory firm Techcet said in a report. While Russia accounts for 35% of the country’s palladium supply, the metal is used in creating some types of semiconductors.
Any disruption is likely to have a far -reaching impact on chip supply, which in turn could drive up chip prices. This in turn could narrow the potential for expansion in the mining industry, which is heavily dependent on chip supply.
If this geopolitical conflict continues, the likelihood of supply disruptions is high in the next few months.
On the other hand there are efforts that are being made. Dutch firm ASML recently said it was exploring alternatives to its current neon supply. Chip-making giants Intel and Taiwan Semiconductor Manufacturing Co. (TSMC) recently announced plans to increase semiconductor manufacturing, amid rising demand. TSMC, the world’s largest chip supplier, announced a $ 44 billion investment to increase supply earlier this year
With Bitcoin hash rates, which hit record highs recently, the mining industry is expected to rely heavily on a stable supply of chips.
